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1. Journal of Investment and Management
2014; 3(1): 21-29
Published online March 10, 2014 (http://www.sciencepublishinggroup.com/j/jim)
doi: 10.11648/j.jim.20140301.13
Adoption of international public sector accounting
standards in Nigeria: Expectations, benefits and
challenges
Ijeoma. N. B.1, *
, Oghoghomeh. T.2
1
Deptartment of Accountancy, Nnamdi Azikiwe University, Awka, Nigeria
2
Department of Accountancy, Delta State University, Asaba, Nigeria
Email address:
amaro4baya@yahoo.com (Ijeoma. N. B.)
To site this article:
Ijeoma. N. B., Oghoghomeh. T. Adoption of International Public Sector Accounting Standards in Nigeria: Expectations, Benefits and
Challenges. Journal of Investment and Management. Vol. 3, No. 1, 2014, pp. 21-29. doi: 10.11648/j.jim.20140301.13
Abstract: This study examined the expectations, benefits and challenges of adoption of International Public Sector
Accounting Standards (IPSAS) in Nigeria. The objectives of this study are determining the impact of adoption of IPSAS on
the Level of Accountability and Transparency in the Public Sector of Nigeria and to ascertain the contribution of adoption
of IPSAS in enhancing comparability and international best practices. Primary source of data was employed to generate the
data of interest. The statistical tools employed were the Chi-square test, Kruskal Wallis test and descriptive analysis. From
the findings of the study, it was observed that adoption of IPSAS is expected to increase the level of accountability and
transparency in public sector of Nigeria. It was found that the adoption of IPSAS will enhance comparability and
international best practices. Also, it was denoted that adoption of IPSAS based standards will enable provide more
meaningful information for decision makers and improve the quality of the financial reporting system in Nigeria. In
addition, it was found that adoption of IPSAS by Nigerian government will improve comparability of financial information
reported by public sector entities in Nigeria and around the world. Hence, we conclude that the adoption of IPSAS in
Nigeria is expected to impact operating procedures, reporting practices thereby strengthening good governance and
relations with the government and the governed.
Keywords: IPSAS, Accountability, Adoption, Government, Public Sector, Financial Reporting
1. Introduction
Over the years, countries of the world have defined and
set the standards of financial reporting in their individual
territories. However, globalization has brought about ever
increasing collaboration, international trade and commerce
among the countries of the world; hence, there is grave
need for increased uniformity in the standards guiding
financial statements so that such statement would remain
comprehensible and convene the same information to users
across the world. The need for the development of unified
accounting standards has been the primary driver of
international public sector Accounting Standards for public
sector financial reporting. While the commercial entities
across the world are moving toward international financial
Reporting standards (IFRS), governments are harmonizing
with International Public sector Accounting Standards
(IPSAS). The international Public sector Accounting
Standards govern the accounting by public sector entities,
with the exception of Government Business Enterprises. [1],
noted that International Public Sector Accounting
Standards (IPSAS) is at present the focal point of global
revolution in government accounting in response to calls
for greater government financial accountability and
transparency. The Public sector comprises entities or
organizations that implement public policy through the
provision of services and the redistribution of income and
wealth, with both activities supported mainly by
compulsory tax or levies on other sectors. This comprises
governments and all publicly owned, controlled and or
publicly funded agencies, enterprises, and other entities of
government that deliver public programs, goods, or
services [2]. Public sector accounting is a system or process
which gathers, records, classifies and summarizes as
reports the financial events existing in the public or
government sector as financial statements and interprets as
required by accountability and financial transparency to

2. 22 Ijeoma. N. B. and Oghoghomeh. T: Adoption of International Public Sector Accounting Standards in Nigeria:
Expectations, Benefits and Challenges
provide information to information users associated to
public institutions. It is interested in the receipts, custody,
disbursement and rendering of stewardship of public funds
entrusted [3]. Nigeria, a leading African nation with the
population of over 150 million people and a foremost
Organization of the Petroleum Exporting Countries (OPEC)
member, with a public sector dominated economy, has
identified the need to consider the value proposition of the
IPSAS and implement same in order to remain relevant.
However, government interventions following the global
financial crisis in the private sector have increased many
governments’ exposures and debt levels. Hence,
decision-making is getting harder, especially if the view of
what is “sustainable” is difficult to see. It is not out of
context to argue the knowledge that weak public sector
accounting, auditing and financial management can, and
likely will, lead to economic crises. However, there is
nothing new in these statements, especially to those that
work in the private sector both in most developing nations.
The focus on the private sector is huge when failure occurs
and therefore accounting, audit and reporting standards are
set at a high level and rigorously enforced. One reason that
makes high quality public sector reporting necessary in
many countries is that Government issued financial
instruments are a very important part of their financial
markets. There exist various crises in many developing
countries especially in Africa; with government debt levels
sitting at very precarious levels; and it is no news that
government finances need to be managed very carefully in
any nation. Achieving this requires high quality information
on which to base decisions. Timely, clear and open annual
financial statements play a significant role in the
accountability of governments to their citizens and their
elected representatives. These financial statements are
prepared on a cash basis or some variation of an accrual
basis of accounting. However, most of these financial
statements are not prepared on a consistent or comparable
basis in developing countries. The benefits of achieving
consistent and comparable financial information across
jurisdictions are very important and a set of International
Public Sector Accounting Standards (IPSAS) have been
established by the IPSAS Board to assist in that endeavour
[4]. [5], identified the following as the concepts of public
sector accounting.
i. Budget: The governmental unit prepares an
operational budget and incorporates it directly into the
financial report and into the systems account where useful;
such a budget indicates the estimated revenue for the next
period, the estimated expenditures referred to as
appropriations which must be met by the revenue and other
sources of financing which may be necessary. While the
commercial sector acknowledges the benefits arising from
budgets, such data are not introduced into the accounts as
in public sector groups where demonstration of compliance
with legal limitations is a critical factor.
ii. Revenues: Additions to assets or reductions in
liabilities always give rise to increase in the residual equity
in a fund. This could be equated to inflows of working
capital. Distinct revenue elements include property taxes or
other taxes receivable, fees for permits, charges for services
rendered, and interest received. Revenue also encompasses
contribution from the general fund to the capital project
fund to cover a portion of a project.
iii. Expenditure: Outflows or commitments for outflows
of working capital include those charges that relate to the
current fiscal period as well as capital outlays and
provisions for debt requirements. Expenditure differs from
expenses (as defined in commercial accounting) because
expenditure includes in addition to charges that benefit the
current period, capital outlays and payment of principal for
debt retirement.
iv. Encumbrances and Obligations: A system of
encumbrances is a means of restricting or reserving
available spending authority pending the recording of
actual liabilities and expenditure. The encumbrance system
is used by most governmental funds, general fund, special
revenue, capital projects and social assessment funds to
demonstrate compliance with legal requirements and to
prevent over expenditure.
Truly, for developing nations to achieve ambitious
socioeconomic goals, developing countries require public
sector institutional capacity for setting and implementing
public policy, which in turn necessitates government
accounting reforms. The social value of government
accounting reform therefore lies in its contribution to
development goals, including poverty reduction. This
rationale has led international and multilateral lenders and
donors to endorse International Public Sector Accounting
Standards (IPSAS) for adoption by developing countries.
An emphasis on assuring financial integrity and a shift to
accruals can make IPSAS more useful in government
accounting reform in developing countries. [6], noted that
in light of the pervasiveness and severity of government
corruption in many developing countries, financial integrity
assurance is a critically important function of their
government accounting systems. Only ethical and
competent public management can efficiently and
effectively implement programs to reduce poverty and
achieve other socioeconomic goals.
[7], linked the origin of corporate governance to the
desire to improve transparency and accountability in
financial reporting by listed companies to their
shareholders. The Sarbanes-Oxley Act 2002 which was a
by-product of the corporate governance challenges in
America provided that management had the responsibility
to establish and maintain adequate internal control structure
and procedures for financial reporting. The nature of
government accounting has the purpose of determining
how much money was received and its sources, how much
was spent and for what purposes and the financial
obligations accrued. Profit is not the main focus, unlike the
private sector which has profit as the prime focus and
determines the profit of the business over a given period.
Hence, many factors influence government accounting such

3. Journal of Investment and Management 2014, 3(1): 21-29 23
as the role of government in the different fields like the
armed forces, health and education and the policies set by
government to achieve its aspirations and goals. Thus,
government accounting is interested in information
gathering that will enable her to prepare Receipts and
Payments accounts [8]. According to [9], even though in
Nigeria, government operations and accounts have been
conducted within the general framework of the principles
of fund accounting, there is a major problem when it comes
to the absolute application of the principles to financial
reporting. [10], proposed the use of accounting information
as additional control mechanism through its effect on
economic performance and corporate governance. [3],
opined that government budget size and the contribution of
public expenditure to Gross Domestic Product are very
great especially in developing economies. There is a thin
line between the public sector and private sector accounting
when looking at concepts and techniques that are employed.
Further, the emerging need and use of information
technology by both the public and private sectors have
made the issue of public sector accounting a pertinent part
of accounting studies in the world. Speaking on the effect
of level of corruption in Nigeria, [11], reported that corrupt
tendencies pervaded the strata of the Nigerian society so
much so that the youths, who are supposed to be the leaders
of tomorrow, are neck deep in examination malpractice,
419 and internet fraud. She recommends that for Nigeria to
be among the most developed economies in 2020, the
nation’s value system should be strengthened through the
reintroduction of civics and ethics into the curricula of the
educational system while a national orientation for the
rebirth of the value system should be urgently initiated. The
need for an improved and increased recognition,
measurement, presentation and disclosure requirements in
relation transactions and events in general purpose financial
statement has led to the adoption of International Public
Sector Accounting Standards (IPSAS). Over the years,
government accounting has been anchored on cash basis of
accounting while private sector accounting has been
predicated on accrual basis. Whereas the accrual basis has
been working perfectly well in the private sector, the
continued application of the cash basis in the public sector
appears to have thrown up a number of challenges relating
to underutilization of scarce resources, high degree of
vulnerability to manipulation, lack of proper accountability
and transparency, inadequate disclosure requirement due to
the fact that the cash basis of accounting does not offer a
realistic view of financial transaction. IPSAS adoption is
expensive in all material respect, so expensive that some
experts have contended that its much advertised benefits do
not justify the cost of the implementation [12]. Sequel to
Nigeria’s decision to adopt IPSAS in the year 2014, this
study aims at determining the impact of adoption of IPSAS
on the Level of Accountability and Transparency in Public
Sector of Nigeria and to ascertain the contribution of
adoption of IPSAS in enhancing comparability and
international best practices.
1.1. Literature Review
[13], reported that the Federal Executive Council of
Nigeria in July 2010 approved the adoption of the
International Financial Reporting Standards (IFRS), and
International Public Sector Accounting Standards (IPSAS),
for the private and public sectors. The adoption is aimed at
improving the country’s accounting and financial reporting
system in consonance with global standards. Consequently,
the Federation Account Allocation Committee, (FAAC), in
June 2011 set up a sub-committee to work out a roadmap
for the adoption of IPSAS in the three tiers of government.
However, he noted that some stakeholders believe that the
tools and strategies needed to fully implement IPSAS in the
three tiers of government in Nigeria are still problematic.
He explained that IPSAS is a good development and an
international best practice which has been embraced in
most developed countries. There is nothing wrong with
Nigeria taking queue in making sure that public entities in
the country fully adopt IPSAS. The practice of government
sector accounting evolved over the years with focus on
cash receipts and disbursements on the cash accounting
basis or modified cash accounting basis. Hence,
government revenue is only recorded and accounted for
when cash is actually received and expenditure is incurred
only when cash is paid irrespective of the accounting
period in which the benefit is received or the service is
rendered. It therefore means that, the amounts incurred by
the government in purchasing fixed assets are treated the
same way as expenses. They are therefore written off as
part of expenditure for the period the costs were incurred
[14]. According to [15], Public sector accounting (PSA) is
defined as a process of recording, summarizing, analyzing,
communicating and interpreting financial transactions of
government units and agencies. It reflects all levels of
transactions, involving the receipt, custody and
disbursement of government funds. It follows therefore that
public sector accountings is essentially, financial
accounting. [16], identified the following as the purposes of
public sector accounting;
a. To demonstrate the correctness and reasonableness of
transactions and their agreement with established rules.
b. To give evidence of accountability for the stewardship
of government resources.
c. To make available vital information for good control
and prudent management of government activities.
Accountability is all about being answerable to those
who have invested their trust, faith, and resources to you.
[11], defined accountability as the obligation to
demonstrate that work has been conducted in accordance
with agreed rules and standards and the officer reports
fairly and accurately on performance results vis-à-vis
mandated roles and plans. It means doing things
transparently in line with due process and the provision of
feedback. [17], observed that the capacity to achieve full
accountability has been and continues to be inadequate,
partly because of the design of accountability itself and

4. 24 Ijeoma. N. B. and Oghoghomeh. T: Adoption of International Public Sector Accounting Standards in Nigeria:
Expectations, Benefits and Challenges
partly because of the widening range of objectives and
associated expectations attached to accountability. He
further argued that if accountability is to be achieved in full,
including its constructive aspects, then it must be designed
with care. The purpose of accountability should go beyond
the naming and shaming of officials, or the pursuit of sleaze,
to a search for durable improvements in economics
management to reduce the incidence of institutional
recidivism. The future of accountability consists in
covering the macro aspects of economic and financial
sustainability, as well as the micro aspects of service
delivery. It should envisage a three-tier structure of
accountability: that of official (both political and regular
civil employees), that of intra-governmental relationships
and that between government and their respective
legislatures. [18], argued that the factors and forces which
militate against accountability in Nigeria include ethnicity
and tribalism, corruption, religious dichotomy and military
culture. [19], added that the major corporate collapses and
related frauds which occurred in Nigeria and around the
world have raised doubts about the credibility of operating
and financial practices of institutions in Nigeria. He noted
that the effect of the doubts has stirred a number of
professional and regulatory organizations/institutions to
recommend reforms that will improve transparency in
financial reporting system in order to increase audit quality
and corporate practices. In many developed nations, the
applications of sound financial system are not new unlike
Nigeria where it is just evolving. [20], suggested that mere
submission of annual reports and accounts timely is
unlikely to solve the problem of public accountability,
rather those reports should be made and incorporated in the
observances of the prevailing standard of financial
reporting. Hence, accountability is the link in the seemingly
perpetual level of analysis controversy and the connection
between individual decision makers and collectives within
which they live and works in institutions. According to [21],
serious consideration is being given to the need to be more
accountable for the often vast amounts of investment in
resources at the command of governments, which exercise
administrative and political authority over the actions and
affairs of political units of people. Government spending is
a very big business and the public demands to know
whether the huge outlays of money are being spent wisely
for public interests. Accountability is a fundamental value
for any political system. Citizens should have the right to
know what actions have been taken in their name, and they
should have the means to force corrective actions when
government acts in an illegal, immoral, or unjust manner.
[22], indicated that best practices in corporate governance
must embrace the structure of the board of directors,
operation of the board of directors and other corporate
governance practices. In addition, the benefits to the
organization for adopting the best practice must
substantially exceed the cost of implementation. [23],
reported that basically, a country’s accounting and
disclosure system is part of its financial system and more
generally its institutional infrastructure. This is geared
towards the informational and contracting needs of the key
parties in the economy and its role in corporate governance
and the capital market. Since the accounting system is
complementary to other elements in the institutional
framework, a fit between them is likely what result in
different accounting system and infrastructural regimes
across countries. The concerns for harmonization of
accounting standards and later, convergence in the 1990s
with International Reporting Standards are due to the
globalization of the capital markets. In fact, it is believed
that accounting harmonization is necessary for the
globalization of capital markets [24]. According to [25],
some of the good financial practices identified in Nigeria
using the 2008 financial statements include: inclusion of
audit certificate from the auditor general; inclusion of four
statements cash flow, assets and liabilities, consolidated
revenue fund and capital development fund and the
consistency of the main totals between them; inclusion of
comprehensive set of notes and accounting policies
including outstanding impress and advances; detailed
schedule provided of internal and external loans; details
provided of subventions to agencies by the overseeing of
ministries and departments; consistency of the financial
statements from 2005 to 2008 (when the new format stated);
financial statement appear on the internet; the development
of some financial reporting guidelines by Federal Account
Allocation Committee (FAAC). The objective of general
purpose financial statements is to provide information to
meet the need of those users of financial statements who are
not in position to demand reporting update to their need. The
users of general purpose financial statements include
taxpayers, members of parliaments, creditors, suppliers, the
media and public sector employees. Financial statements
prepared in accordance with IPSASs must present fairly the
financial position, financial performance and cash flows of
an entity. In order to meet this requirement, a public sector
entity must first of all observe general qualitative
characteristics of financial reporting. Such qualitative
characteristics of financial reporting are fundamental
principles for preparing financial statements in accordance
with IPSASs. The four principal qualitative characteristics
are understandability, relevance, reliability and
comparability [26]. These principles ensure that the users of
financial statements are provided with useful information for
decision-making purpose. Constraints on relevant and
reliability of information include; timeliness, balance
between benefit and cost, and balance between qualitative
characteristics. A complete set of financial statements in
accordance with IPSASs comprises of the following
components: (a) a statement of financial position; (b) a
statement of financial performance; (c) a statement of
changes in net assets/quality; (d) a cash flow statement; (e)
when the entity makes publicly available its approved
budget, a comparison of budget and actual amounts either as
separated additional financial statements or as a budget
column in the financial statements; and notes that comprise a

5. Journal of Investment and Management 2014, 3(1): 21-29 25
summary of significant accounting policies and other
explanatory notes. According to [27], replies from
secretariats to joint inspection unit showed that the main
benefits that United Nations system organizations expected
from the transition of IPSAS were: improved financial in
terms of transparency (84.2%), standardization,
harmonization and consistency (57.9%), quality (52.6 %);
comparability (47.4%), improved internal controls (36.8%),
as well as other benefits as illustrated in Figure 1.
Figure 1. Expected benefits from IPSAS.
In addition, [27], listed the following set of 16 best
practices for implementing a smooth transition to IPSAS:
1. Set up an interdepartmental IPSAS project steering
committee or equivalent body tasked with ensuring that
senior management understand the goals and vision driving
the transition to IPSAS.
2. Conduct an in-depth analysis of gaps between existing
business processes, procedures, financial reporting and
functionalities developed under SAS and the requirement
and impact of each IPSAS Standard.
3. In case of a major shift in the project environment
re-assess the initial IPSAS adoption strategy and adjust this
as necessary.
4. Apply proven project planning and implementation
methodologies including clearly defined strategic
objectives, deliverables, timeliness, milestones and
mentoring procedures.
5. Develop a strategy for producing IPSAS compliant
opening balances for the targeted implementation date (first
day of the first year of compliance) as well as the closing
balance for the previous day, based on the previous
accounting standard (SAS), but easily translatable into
IPSAS terms for the opening balance of the targeted year.
6. With a view to ensuring continued engagement of
governing bodies in the change process, regularly update
the governing bodies on progress made in the implantation
of IPSAS and request that they adopt the relevant decisions,
in particular with regard to amendments required to
financial regulations and allocation of resources for the
project.
7. Determine and budget for the additional human
resources required in the administrative budgetary and
finance areas to ensure not only effective implementation
of the transition to IPSAS but also adequate capacity to
maintain future IPSAS compliance.
8. Ensure that financial resources are made available for
training where feasible, of in-house experts in accounting,
business and change management or for the recruitment of
external experts.
9. Thoroughly analyze existing (legacy) information
system for comparability and synergy with IPSAS
requirements and, as a major element of the initial gap
analysis, appreciates the changes that the system must
undergo to support IPSAS.
10. Communicate awareness on the transition to
IPSAS through all available means of communication,
training and documentation.
11. Ensure that existing and future staff, in particular
managers, supply chain and finance staff, are fully
familiarized with the new procedures and requirements
through the use of specific documentation (manual) and
trainings.
12. Adopt risk assessment, management and
mitigation strategies and practices for project
implementation in accordance with the projects’ objectives.
13. Plan and prepare interim financial statements for
review by external auditor(s) well ahead of the final
implementation data to avoid unpleasant surprises.
14. Establish and maintain, as soon as feasible, a
bilateral dialogue between the organization and its external
auditor(s) on the transition to IPSAS to help ensure that
both external and internal auditors gain in depth
understanding of the new system and its impact on control
procedures, as the implementation of IPSAS would require
migration to accrual based accounting.
15. Perform continuous testing of internal controls
during the preliminary implementation stage of an IPSAS
project to ensure the accuracy of the data.
16. Ensure that an independent and comprehensive
validation and verification of the system is performed
towards the end of its completion.
Nigeria’s migration to the accrual basis of accounting will
definitely not come without challenges. The expected
challenges include:
(a) Systematic identification and valuation of assets and
liabilities as at the date from which accrual accounting
is to commence.
(b) Lack of adequate technical resources
(c) Political ownership such as inadequate support at the
highest levels of the executive
(d) Consolidation issues
The following are conditions precedence for a successful
migration to accrual basis of accounting:
(a) An acceptable cash accounting based system-
Countries with inadequate budget classification, no
Unified double entry based general ledger system, and
inadequate fiscal reporting are advised to adopt Cash
Basis of Accounting before migrating to Accrual Basis.
(b) Entities or government considering a move to accrual
accounting must have either a core of officials with

6. 26 Ijeoma. N. B. and Oghoghomeh. T: Adoption of International Public Sector Accounting Standards in Nigeria:
Expectations, Benefits and Challenges
required technical skills such as accounting,
information technology etc., or the capacity to recruit
such people for its key positions
(c) Total support from the political class
(d) Adequate system; with multi dimensional reporting
requirements of accrual based IPSAS, implementation
of full accrual accounting can only be effective with
the aid of a modern government financial management
information system (GFMIS) with proven functionality
in areas such as general ledger, accounts payable,
purchases, assets management, etc.
Financial reports prepared on an accrual basis allow users
to:
(a) Assess the accountability for all resources the reporting
entity controls and the deployment of those resources;
(b) Assess the performance, financial position and cash
flow of the entity; and
(c) Make decisions about providing resources to, or doing
business with, the entity.
The accrual-based IPSAS accounts are more complete
than the cash-based ones and by definition eliminate the
scope for manipulating payments and receipts in order to
suit specific reporting and control objectives [27]. Also, the
information available from accrual-based accounts can
improve management and decision-making and help
organization make more efficient use of resources (with the
cash-based accounting, spending on what is used over many
years is recorded only when the money is spent and no
subsequent account is taken of whether the asset is still in
use, has reached the end of its useful life or has been sold).
The accrual-based accounting provides the opportunity to
introduce efficient cost accounting features and to change
organizational behavior through the use incentives and
penalties including comparisons of the costs of services
provided by the private and public sectors; as well as the
opportunity to establish effective performance measures that
are not impacted by the vagaries of the timing of cash
payments and receipts and which include information about
fixed and current assets and liabilities. Accrual-based
accounting gives a more reliable picture of an entity’s
financial health. Fair value is another principal measurement
base of IPSASs which referred to measuring assets and
liabilities for example IPSAS 4, 9, 12, 13, 15, 16, 17, 21, 26,
27, 29, 31 or 32. Fair value is defined as the amount for
which an asset could be exchanged, or a liability settled,
between knowledgeable, willing parties in an arm’s length
transaction. Fair value is also at the heart of the revaluation
method for measuring property, plant and equipment after
recognition as an asset [28].
In addition, some critical success factors of adoption of
IPSASs include: political will and ownership, technical
capacity (training, re-training and personnel development),
public orientation and enlightenment, automated
information system financial ability and modular
implementation. Also, the adoption of IPSASs will generate
lots of benefits such as political and economic benefits.
Political benefits of adoption of IPSASs include:
(a) Accountability: IPSAS requirement for increased
disclosure in accounting reports increases the level of
accountability in government
(b) Transparency: where IPSAS is adopted, full disclosure
become an imperative of public sector accounting
government
(c) Improved Credibility/Integrity: government
accounting/reporting cannot be credible if government
itself decides the rules. Hence, the need for a body
like IPSAS that will set the rules
(d) Political Leverage: Government may be required to
provide accounting information by higher or legal
authority like the United Nations
(e) International Best Practice and Comparability: IPSAS
seeks to ensure that financial statements prepared in
the basis of it are internationally comparable
(f) Comparable information assists the stakeholders in
assessing how well their resources have been utilized
(g) Greater Disclosures: IPSAS encourages full disclosure,
which hinges on transparency, integrity and
accountability
(h) Increased control of public agencies: the increased
disclosure, transparency and comparability IPSAS
engenders will permeate the public sector in turn
yielding greater accountability
Economic benefits of adoption of IPSASs include:
(a) Building confidence in donor agencies and lenders:
adoption of IPSAS increases the country’s eligibility to
access economic benefits from donor agencies (USDP,
USAID etc.), private sector financial institutions
(Bonds and Bonds rating agencies), official institutions
(IMF and World Bank)
(b) Improved services delivery: As a result of greater
accountability and transparency, adoption of IPSAS
will improve Value for Money (VfM) expenditure
(c) Aggregate Reporting: Adoption of IPSAS will ensure a
holistic reporting of government financial transactions
and positions
(d) Enhanced public-private partnership arrangements:
Collaborative efforts between the public and private
sectors is enhanced with both running on similar set of
accounting standards (IPSAS and IFRS)
(e) Economic leverage: Sovereign nations are induced
with the prospect of commensurate benefits.
Government susceptible to economic leverage is more
likely to adopt IPSAS.
2. Material and Methodology
2.1. Data Collection
This study focused on all accounting departments of
various ministries in Awka, the capital of Anambra State,
Nigeria. The element of the population consist of junior,
intermediate, senior and professional accountants, auditors
(internal and external), cash officers as well as some
accounting lecturers in Nnamdi Azikiwe University Awka.

7. Journal of Investment and Management 2014, 3(1): 21-29 27
The population size was forty-five (45) and 40 samples
were drawn using the Taro Yamane sample size
determination technique at 95% confidence level (see [29]).
Hence, primary source of data collection was employed for
data generation. The ministries and the local government
finance and treasury departments where response were
drawn from are: Ministry of Finance, Ministry of
Environment, Ministry of Education, Ministry of Head of
Service, Ministry of Economic Planning and Budget,
Ministry of Housing and Urban Development, Ministry of
Information and Culture, Ministry of Justice, Ministry of
Housing, Works and Transportation, Ministry of Science
and Technology, Ministry of Women Affairs, Ministry of
Health, Office of Local Government Auditors in Awka,
Local Government Service Commission (LGSC) Awka and
Accounting Lecturers of Nnamdi Azikiwe University Awka.
The statistical tools used were the Chi-square test, Kruskal
Wallis test and descriptive analysis.
3. Analysis and Result
3.1. Chi-Square Test on the Impact of Adoption of IPSAS
on the Level of Accountability and Transparency in
Public Sector of Nigeria
H00: The adoption of IPSAS will not increase the Level
of Accountability and Transparency in Public Sector of
Nigeria
H01: The adoption of IPSAS will increase the Level of
Accountability and Transparency in Public Sector of
Nigeria
Expected counts are printed below observed counts
Table 1. Chi-Square Test Result.
Agree
Strongly
agree
Undecided
Strongly
disagree
Disagree Total
1 8 31 1 0 0 40
17.00 11.33 4.83 3.83 3.00
2 22 5 4 3 6 40
17.00 11.33 4.83 3.83 3.00
3 16 23 0 1 0 40
17.00 11.33 4.83 3.83 3.00
4 10 3 8 16 3 40
17.00 11.33 4.83 3.83 3.00
5 21 2 7 3 7 40
17.00 11.33 4.83 3.83 3.00
6 25 4 9 0 2 40
17.00 11.33 4.83 3.83 3.00
Total 102 68 29 23 18 240
Chi-Sq = 4.765 + 34.127 + 3.040 + 3.833 + 3.000 + 1.471 + 3.539 +
0.144 + 0.181 + 3.000 + 0.059 + 12.010 + 4.833 + 2.094 + 3.000 +
2.882 + 6.127 + 2.075 + 38.616 + 0.000 + 0.941 + 7.686 + 0.971 +
0.181 + 5.333 + 3.765 + 4.745 + 3.592 + 3.833 + 0.333 = 160.179
DF = 20, P-Value = 0.000
3.2. Kruskal-Wallis Test on the contribution of adoption of
IPSAS in Enhancing Comparability and International
Best Practice
H02: The adoption of IPSAS will not enhance
comparability and international best practice
H12: The adoption of IPSAS will enhance comparability
and international best practice
Table 2. Ranks.
Option N Mean Rank
Responses
1.00 6 24.25
2.00 6 20.92
3.00 6 12.92
4.00 6 8.00
5.00 6 11.42
Total 30
Key: 1= Agree, 2= Strongly agree, 3= Undecided, 4= Strongly disagree,
and 5= Disagree
Table 3. Test Statisticsa,b
Response
Chi-Square 14.985
df 4
Asymp. Sig. .005
a. Kruskal Wallis Test
b. Grouping Variable: Option
Figure 2. Percentage Distribution of Respones on Quality Accounting
benefits of adoption of IPSAS.
Figure 3. Percentage Distribution of Respones on impact of adoption of
IPSASon Comparability of Financial Information Reported by Public
Sector Entities in Nigeria.

8. 28 Ijeoma. N. B. and Oghoghomeh. T: Adoption of International Public Sector Accounting Standards in Nigeria:
Expectations, Benefits and Challenges
4. Discussion
Result of analysis in Table 1 showed that most of the
respondents agreed that the adoption of IPSAS will
increase the level of accountability and transparency in
public sector of Nigeria since the column total weight of
102 for option “Agree” was observed to be the highest
weight. Also, it was denoted that the adoption of IPSAS
will increase the level of accountability and transparency in
public sector of Nigeria since the Chi-Square measure
obtained is given as 160.18 and a p-value of 0.00 which
falls on the rejection region of the hypothesis. Hence, the
null hypothesis was rejected since the p-value=
0.00 05.0=< α , assuming a 95% confidence interval.
Also, from the result displayed in Table 4, it was observed
that most of the respondents agreed that the adoption of
IPSAS will enhance comparability and international best
practices since the highest mean Rank of 24.25 was
obtained for Agree. Also, Table 5 expressed that the
adoption of IPSAS will enhance comparability and
international best practices since the Chi-Square measure
obtained was 14.99 and a corresponding p-value of 0.01
which falls on the rejection region of the hypothesis. Hence,
the null hypothesis was rejected since the p-value=
0.01 05.0=< α , assuming a 95% confidence interval. This
result implies that the adoption of IPSAS will enhance
comparability and international best practices.
Figure 2 showed that majority (62.5%) of the
respondents believe that adoption of IPSAS based
standards will enable the provision of more meaningful
information for decision makers and improve quality of
financial reporting system in Nigeria. In addition, Figure 3
showed that majority (75%) of the respondents claim that
adoption of IPSAS by Nigerian government will improve
comparability of financial information reported by public
sector entities in Nigeria and around the world.
5. Conclusions
This study examined the expectations and benefits of
adoption of International Public Sector Accounting
Standards in Nigeria. Nigeria is expected to adopt the
International Public Sector Accounting Standards in 2014.
Sequel to Nigeria’s implementation and adoption of this
accounting standard, the present study examined possible
benefits of adopting the system. From the findings of the
study, it was observed that adoption of IPSAS is expected to
increase the level of accountability and transparency in
public sector of Nigeria. It was found that the adoption of
IPSAS will enhance comparability and international best
practices. Also, it was denoted that adoption of IPSAS based
standards will enable the provision of more meaningful
information for decision makers and improve the quality of
financial reporting system in Nigeria. In addition, it was
denoted that adoption of IPSAS by Nigerian government will
improve comparability of financial information reported by
public sector entities in Nigeria and around the world. Hence,
we conclude that the adoption of IPSAS in Nigeria is
expected to impact operating procedures, reporting practices
and hence strengthen good governance and relations with the
government and the governed [13]. Furthermore, it is
expected to provide useful information for better
management and decision, IPSAS will also expose the
government and finance officers to greater public scrutiny
thereby making them more accountable for the efficiency
and effectiveness of their services. The adoption of IPSAS
will no doubt serve as the foundation for financial reporting
system in Nigeria and equally build trust between the
government and the citizens.
In essence, from the result and findings of the present
study, we recommend that government should engage
professionals to drive the process and also involve external
professionals to leverage best practices. Also, due to the
challenges of availability of electricity and internet services
especially in the rural areas hosting majority of local
governments, we recommend for a start and centralization
of the operations in terms of record keeping at the state
capitals. Finally, since the benefits of IPSAS adoption
cannot be quantified as argued in the present study, the
researcher recommends the adoption of International Public
Sector Accounting Standards in Nigeria.
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